Megan Accepts an Assignment Working in Germany for the First

question 26

Multiple Choice

Megan accepts an assignment working in Germany for the first 9 months of 2019 from Ferguson Corporation.Ferguson Corporation paid Megan's salary of $78,000 plus an additional $7,000 bonus.Megan paid $5,000 to the German government in taxes on this income.During 2019, Megan also earned $9,000 of interest income from corporate bonds and $4,000 of dividend income from U.S.corporations.The maximum foreign earned income exclusion for 2019 is $105,900.How much should Megan include in her gross income on her U.S.tax return for 2019?

• A)$98,000
• B)$20,000
• C)$13,000
• D)zero

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Definitions:

Bargain Purchase

A scenario in which a company acquires another company for a price less than the fair market value of its net assets.

Equity Financing

Raising capital through the sale of shares in a company, resulting in new shareholders and diluting the ownership stake of existing shareholders.

Notes Payable

written promissory notes in which the writer agrees to pay a certain amount of money, at a future date or on demand, to the holder of the note.

Revaluation Accounting

A method under International Financial Reporting Standards (IFRS) that allows an entity to adjust the book value of its assets and liabilities to their fair value.